Westpac Repays More Than $50 Million After Widespread Underpayment Spanning 11 Years

Incident Overview

Westpac has repaid more than $50 million to nearly 47,000 employees after uncovering widespread underpayments that occurred over more than a decade. The Fair Work Ombudsman (FWO) confirmed the repayments on Thursday, describing the bank’s compliance failures as extensive and systemic.

Details of the Underpayment
According to the FWO, the underpayments occurred between January 2014 and February 2025 and were caused by “significant shortcomings” in Westpac’s systems, governance structures and compliance oversight.

Failures included:

• incorrect application of casual loading
• underpayment of minimum wages for ordinary hours
• unpaid allowances including higher duties and weekend penalties
• incorrect termination and leave payments
• poor record-keeping and reliance on manual data entry systems

The bank has so far repaid $50.26 million in wage corrections, along with almost $9 million in interest and superannuation. Individual repayments ranged from under $5 to $56,085, with the average underpayment sitting around $1000.

The FWO also confirmed $90,490 was transferred to the Federal Government’s unclaimed monies fund for former employees who could not be located.

Fair Work Ombudsman Response
Fair Work Ombudsman Anna Booth said Westpac has signed an Enforceable Undertaking (EU), which the regulator considered appropriate given the bank’s cooperation with the investigation.

“Westpac has made full back-payments for all underpayments owed to employees it could locate,” Booth said.
“This includes back-payments extending well beyond the six-year liability limitation period.”

Under the EU, Westpac must:

• rectify any future underpayments in full, including interest and superannuation
• commission an independent audit of its payroll and entitlement systems
• pay an $800,000 contrition payment to consolidated revenue
• implement stronger processes to prevent further breaches

Westpac’s Position
Westpac self-reported the underpayments in December 2020 after uncovering discrepancies in its internal review.

In a statement, the bank said:
“We’re genuinely sorry this happened. Paying our people correctly is a fundamental obligation … we apologise again to all affected employees.”

Westpac also confirmed it:

• did not seek repayment from employees who were previously overpaid
• invested significantly in upgrading payroll and entitlement systems
• repaid both current and former staff affected by the breaches

Regulatory and Industry Context
The repayments mark one of the largest remediation efforts in Australia’s financial services sector since the banking underpayment scandals of the early 2020s.

The case highlights ongoing challenges within complex payroll environments — particularly in large organisations operating multiple employment instruments, rosters and allowance structures.

The FWO said its December 2020 investigation began only after Westpac voluntarily disclosed the breaches, a factor that contributed to the lighter enforcement outcome compared with court proceedings.

In Summary

With more than $59 million now repaid, the matter represents one of Australia’s most significant corporate underpayment cases in recent years. Westpac has pledged that strengthened systems, auditing and governance changes will prevent similar breaches occurring in future, as it continues to overhaul its compliance framework under Fair Work supervision.